San Leandro City Manager Discloses Allegation of Sexual Misconduct Reportedly Made Against Him by Local CEO

In an apparent preemptive move, San Leandro City Manager Chris Zapata released a lengthy letter Tuesday that rebuts unspecified and, until now, not publicly known allegations of improper sexual conduct reportedly made against him by the CEO of a well-known local non-profit who is also part of a group hoping to finalize the opening of medical cannabis dispensary in the city.

In the detailed letter sent late Tuesday afternoon, Zapata accused long-time Davis Street Family Resource Center CEO Rose Johnson, and former San Leandro councilmember and businessman Gordon Galvan of leveraging the timing of the allegation to increase its chances later this month of wrapping up approval to open the potentially lucrative Davis Street Wellness Center medical cannabis dispensary in San Leandro (The Resource Center and Wellness Center are separate entities, but are linked by Johnson and Galvan’s participation in each operation).

Zapata also details a years-long history of Galvan and his associates pressuring him and city officials into approving the dispensary’s original permit two years ago, while also offering Zapata tickets to sporting events, expensive bottles of tequila, and an offer by Galvan to rent a four-bedroom home to Zapata for below-market rate.

In a statement, Mayor Pauline Cutter Russo said, “The investigation is confidential, so at this time, the City does not have additional information about the investigation. The allegations are allegations at this point. The City does not know when the investigation will be complete, but will update the community when there are developments in the investigation.” Zapata’s memo not only disclosed the allegations against him before the city or Rose and Galvan could do so, but also the City Council’s apparent decision to retain outside counsel to investigate the matter. San Leandro City Attorney Richard Pio Roda confirmed Tuesday night that a complaint has been received by the city and is being investigated, but was unaware beforehand that Zapata had disseminated the 23-page document to the public.

Rumors of backroom dealings, hardball politics and the general allegation of misconduct made by Johnson against Zapata have floated around San Leandro politics from as early as last spring. Three San Leandro councilmembers, according to Zapata, made inquiries to him about rumors he acted improperly with Johnson. Furthermore, including various local news outlets, Assemblymember Rob Bonta’s office asked about the allegation, as did an Alameda councilmember, he wrote. Zapata also announced he will recuse himself from any city business related to Johnson, Galvan, and their various business and philanthropic relationships with the city.

With news of a complaint being made against Zapata this month, he questions the timing of the allegation. “When allegations are made, a fundamental question is what motives are related[?],” wrote Zapata. His fate as city manager, he acknowledges, is also up in the air. Over more than a month, the City Council has discussed his performance review on numerous occasions without resolution. “I also understand,” wrote Zapata, “that negative findings may result in discipline up to termination of my contract as city manager.”

Shortly after Councilmember Pete Ballew was sworn into office in early January 2017 he inquired about an allegation that Zapata “acted inappropriately” with Johnson at a Foster’s Tastee Freeze restaurant parking lot in San Leandro. The alleged incident occurred during the day in Johnson’s SUV and Zapata believed it amounted to a business meeting. “I adamantly denied any inappropriate behavior and produced text messages from Ms. Johnson inviting me to ice cream,” he stated. Furthermore, the only contact he has ever had with Johnson, according to the letter, is a “business handshake.”

Johnson did not immediately return a voicemail late Tuesday asking for comment.

Sometime later in early 2017, Councilmember Ed Hernandez also asked Zapata about the same incident, but “this allegation had a twist in that there was an implication that I had imprisoned Johnson in her vehicle,” wrote Zapata, who also denied this allegation and instead believes Galvan proffered the second allegation to Hernandez. The third councilmember to ask about Johnson’s allegation, according to Zapata, was Corina Lopez.

During an interview in early November for an article on the Davis Street Wellness Center’s difficulties in gaining approval for a conditional-use permit required, Johnson declined to answer questions regarding chatter about alleged misconduct by Zapata.

The most inflammatory statements made by Zapata, though, were directed at Galvan, a well-known fixer, local government lobbyist and businessman. Zapata said over the years Galvan has offered him Warriors, Giants tickets, offered access to his own personal tailor, free dinners at his Alameda restaurant, top-notch seats at an Eddie Money concert and an offer to Zapata to rent him his four-bedroom, two-bath home for $1,900 a month. Zapata said he was uncomfortable with the offers and declined each overture from Galvan, including an expensive bottle of tequila from a Galvan associate, he wrote. Zapata suggest the goodwill ultimately led to Galvan lobbying him for a client interested in opening a dispensary in San Leandro.

In large part the conflict in San Leandro stems from the issuance of a operating permit in 2016 to the San Leandro Wellness Center. The group had previously missed out on winning San Leandro’s first-ever dispensary permit in 2015, which went to Oakland’s Harborside. Galvan, according to Zapata, was despondent over the defeat and seemingly vowed revenge. After the council vote, Zapata said Galvan, who was on a cruise at the time, sent him a text message, repeating the phrase, “I will not forget, I will not forget, I will not forget.” Zapata texted back “?” Galvan responded with another text again repeating “I will not forget” three times. Galvan later told Zapata that he sent the repeating message because he was unsure the texts were transmitted.

Galvan, Zapata continued, reportedly told the Davis Street Family Resource Center’s governing board that the bid lost because the “city manager probably had a deal.” Zapata says he later confronted Galvan about the disparaging comment. “How could you say that?” Zapata said he asked Galvan. “I was wrong and I’m apologizing,” said Galvan, according to Zapata.

Nevertheless, the City Council decided in 2016 to award a dispensary permit to the Davis Street Wellness Center, but not before the group agreed to secure a conditional-use permit within one year. The stipulation, though, would come back to haunt the new dispensary permit holders and Zapata’s insistence the council stick to the deadline further angered Johnson and Galvan.

In the meantime, questions about the Davis Street Family Resource Center’s finances, which Johnson helmed, were beginning to be raised publicly by Councilmember Lee Thomas over the well-known non-profit’s inability to repay a $1.5 million loan issued by the city to back a federal loan that was used by Johnson to build a new health care clinic in San Leandro.

After Johnson began making overtures to the city about a loan extension, Zapata, like Thomas, also became concerned. In addition, according to Zapata, “Johnson was making a proposal that the $1.5 million federal clinic loan would be paid off when the dispensary was awarded.” The appearance of quid pro quo, worried Zapata and he moved to separate the two issues before the council. Ultimately an Oct. 31, 2016 deadline for payment of the $1.5 million blew by without receipt. Worse, the property belonging to Davis Street, and used to secure the loan, had not been properly recorded by the city. Zapata said he was told by Councilmember Corina Lopez that Galvan had labelled the mistake a “fireable offenses.” In other words, Galvan was trying to get Zapata terminated, according to the city manager’s perspective.

Others may have also had designs on getting Mayor Cutter effectively fired at the ballot box this year because of her growing opposition to the Davis Street Wellness Center bid. Zapata referenced unnamed individuals connected to the Davis Street Family Resource Center who told Councilmember Hernandez they were interested in raising $50,000 to seed a campaign for him against Cutter this fall. Cutter heard the rumor and relayed the incident to Zapata. Last October, Hernandez confirmed to the East Bay Citizen that, indeed, he was offered, but did not accept, a proposal to fund a challenge against Cutter.

Zapata believes Galvan continued to use his East Bay connections to put pressure on the city by enlisting a even more formidable political mover and shaker, former State Senate Pro Tem Don Perata. During Christmastime 2016, Zapata said an unnamed individual recounted a phone call they received from Perata asking “why the city manager of San Leandro was treating Rose Johnson so badly.” Perata also attended a meeting with Zapata, Galvan and others involved with the dispensary at San Leandro City Hall.

Last November, the dispensary permit controversy appeared to be heading toward some semblance of a resolution. Despite the city’s opposition to the Davis Street Wellness Center’s proposed location–inside the Davis Street Family Resource Center building–the San Leandro Board of Zoning Adjustments sided with Johnson and Galvan’s plan. But the city continued to maintain a long-standing opinion that since the Teagarden Street property was originally purchased by the Davis Street Family Resource Center with a $500,000 loan from the city’s Community Block Development Grant (separate from the contested $1.5 million loan) and the city deemed a dispensary was not a permitted use under the loan agreement. Therefore, the city’s loan, now roughly $350,000, would have to be repaid before the dispensary could open for business. A deadline for repayment of the loan is set for the end of this month.